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CHARENTON-LE-PONT, France—EssilorLuxottica (Reuters: ESLX.P) posted strong results for the year ended Dec. 31, 2019. Full year revenue rose to €17.4 million, up 7.4 percent compared to prior-year pro forma revenue, or 4.4 percent over year ago at constant exchange rates. Adjusted gross profit as a percent of sales came in at 62.6 percent, while adjusted operating profit was stable at 16.2 percent of sales. Adjusted net profit, which strips out acquisitions and other costs, rose 9.2 percent compared to the prior year, or 4.8 percent at constant exchange rates, to €1.94 billion last year.

Laurent Vacherot, CEO of Essilor, said, “In its first full year, EssilorLuxottica delivered a solid performance. It advanced on its mission and delivered innovative products at every price point to customers and consumers worldwide while generating profitable growth. This translated into strong revenue, free cash flow and net profit growth, in line with guidance.

"The company also implemented a range of structural decisions in order to start the integration process and the delivery of the expected synergies presented at its Capital Markets Day. Essilor, for its part, performed strongly. It continued to leverage its unique innovation capabilities in vision care and eyewear, its digital platforms and the flexibility provided by its global network of interconnected plants and prescription laboratories,” said Vacherot.

Francesco Milleri, deputy chairman and CEO of Luxottica, said, "When we look at Luxottica’s performance over the past year, there is so much to be proud of, both in terms of our solid results and many notable achievements—our continued digital transformation in particular proved that the work we’ve done over the past five years is paying off.

"Along with growing and improving our profits, we set a new standard for the way technology can elevate an entire organization, from online sales growth to our deep connections with consumers across every channel. These successes, along with our outstanding cash flow generation of €1.2 billion, were key contributors to EssilorLuxottica’s overall results for the year,” he said.

EssilorLuxottica said its revenue growth was propelled by strong performances across all divisions with the best performance from Sunglasses & Readers up 8.9 percent, Lenses & Optical Instruments up 5.5 percent, and Retail up 4.0 percent.

Direct e-commerce, which represented around 5 percent of consolidated revenue, grew by 16 percent at constant exchange rates, with positive trends across all major platforms and regions. Europe grew by 5.1 percent at constant exchange rates, and North America was in line with global market growth at 3.1 percent, the company said.

Key investment fueled new product launches, notably Transitions Signature GEN 8 and VisionR 800, further digitalization of the business, stronger offerings on proprietary e-commerce sites, refurbishment of key retail stores and expansion of operating structures in fast growing markets. The proposed acquisition of GrandVision and several bolt-on transactions such as Barberini in Italy and Brille24 in Germany also contributed to growth.

EssilorLuxottica’s fourth quarter revenue totaled €4.3 million, up 6.5 percent from year-ago, or 4.5 percent at constant exchange rates. Lenses & Optical Instruments grew by 5.2 percent at constant exchange rates, and e-commerce posted double digit-growth. Sunglasses & Readers grew by 10.1 percent at constant exchange rates.

Wholesale rose by 2.4 percent at constant exchange rates in fourth quarter, which EssilorLuxottica attributed to a strong performance in North America, including independents, key markets in Europe, steadily sound trends in Brazil with Oticas Carol and rebuilt Mainland China. Retail continued on a solid path, up 4.6 percent at constant exchange rates, thanks to the optical networks in North America, including positive trends at LensCrafters, as well as the entire business in Australia, Europe and Brazil.

EssilorLuxottica noted that structural decisions were made during 2019 to create a strong foundation for further integration and accelerate synergy delivery in 2020 and 2021, in line its previously announced plans.

These decisions included defining a single IT platform to be rolled out across the company, after an ongoing pilot project in Italy; creating a single network of prescription laboratories, as part of an integrated supply chain; establishing a unified platform for the provision of complete pairs of branded glasses, starting with the availability of full prescription products under the Ray-Ban brand both in the clear and sun segments; and the full integration of Costa into the brand portfolio of Luxottica.